30 Apr

TD Economic HighLights.


Posted by: Kimberly Walker



   Fears of contagion in Europe’s government bond market grew this weak as S&P downgraded the sovereign debt of Greece, Portugal and Spain

•   The USD rallied as investors sought refuge in U.S. Treasuries, meanwhile stocks fluctuated as strong earnings counteracted investor risk aversion

•   US Q1 GDP recorded solid 3.2% annualized growth, further supporting our view that the economic recovery is both sustainable and gaining traction

•   Personal consumption expenditures and private fixed investment showed signs of strength, while net export growth disappointed

•   The Fed’s policy meeting this week was rather bland, as the FOMC reiterated its commitment to keep rates low for an ‘extended period’

•   Canadian economic activity advanced 0.3% M/M in February, an eased pace from January but still putting real GDP on track for a 5.3% annualized gain in Q1/2010

•   The goods-producing sector accounted for the bulk of February’s GDP advance, led by a 1.2% M/M increase in manufacturing activity

•   Pace of appreciation in Canadian Teranet-NB home price index (a quality-adjusted measure preferred over the average re-sale price) accelerated to 9.9% Y/Y in February, from 7.5% Y/Y in January

•   However, the monthly increases in the home price index are slowing, with a 0.2% M/M rise in February – the slowest pace of gain since the April 2009 turn in the index


29 Apr

White Rock Neighbourhood Garage Sale – Over 25 Homes


Posted by: Kimberly Walker

8th Annual Garage Sale Sponsored

By The Walkers

Saturday, May 1 at 9:00 AM

Bell Park: Maps & Address Lists Available:

                   13761 18A Avenue & 13824 19A Avenue

Specialty Items

1. 13868 19A Avenue books, clothing

2. 13836 19A Avenue kids skates, soccer gear

3. 13816 19A Avenue clothes, shoes, furniture

4. 13796 19A Avenue antiques dishes, collectables

5. 13690 18A Avenue

6. 13761 18A Avenue

7. 13768 18A Avenue bedroom furniture

8. 13781 18A Avenue

9. 13885 18A Avenue cedar scrubs, perennials, household items

10. 13899 18A Avenue 

11. 13936 18A Avenue brass head and foot board, TV., TV stand

12. 1921 139A Street kids toys, books, decorative accessories, brand

new car tires – 2009 Toyota Sienna

13. 13885 18 Avenue all house furniture, drum set, keyboard

14. 13761 18 Avenue


Amble Greene:

Maps & Address Lists Available: 13521 19A Avenue

1. 13521 19 Avenue furniture, sports equipment, books, fabric

2. 13561 19 Avenue kids toys

3. 1741 Amble Greene Dr furniture, pictures, black curtain rods, basket ball hoop, aluminum shutters

4. 1693 134B Street kids toys


Chantrell Park:

Maps & Address Lists Available: 2281 Chantrell Park Drive

1. 2281 Chantrell Park Dr furniture, wetsuits, wooden canoe paddles,   life jackets, body surf boards, books

2. 2289 138A Street small appliances, small trailer, treasures

Elgin Park:

Maps & Address Lists Available: 3105 142nd Street

1. 3105 142 Street multi family kids toys, small appliances

2. 14240 29A Avenue household items from summer cabin, kids toys

3. 14088 31A Avenue

4. 14099 31A Avenue

5. 14136 29 Avenue


29 Apr

Interest Are Rising Again – Call for Rate Hold or Refinance Now


Posted by: Kimberly Walker

Are Big Banks jumping the gun?

Rob Carrick

 The Globe and Mail Published on Thursday, Apr. 29, 2010

 Interest rates are rising – we all get that – but it looks like the Big Banks are pushing things a bit with mortgages.

 After a pair of increases in the past two weeks, the posted Big Bank five-year fixed mortgage rate now stands at 6.25 per cent. Does that seem high? In fact, it’s just half a percentage point below the average level for the past decade.


We’re supposed to be in the early phase of what could be a long cycle of rate increases. The Bank of Canada hasn’t even started raising its overnight rate, which sets the trend for borrowing costs other than fixed-rate mortgages. The overnight rate could very well start rising June 1 (that’s the central bank’s next rate-setting date), but even then it’s not dead certain that rates will move.


Mortgage rates are linked to bond yields, which have been rising for a while now. But mortgage rates have been moving faster.


Thanks to the always helpful Bank of Canada online interest rate database, we know that the yield for five-year Government of Canada bonds has averaged 4.03 per cent since the beginning of 2000. Five-year Canada bonds had a yield of 3.02 per cent yesterday, which means they’re three-quarters of the way back to their average of the past decade.


The 10-year average for posted five-year fixed-rate mortgages is 6.75 per cent, which means this rate is almost 93 per cent of the way back to its long-term average. There is zero consensus that things have normalized after the financial crisis, but the banks are just about all the way back to pricing mortgages as if they were.


And, no, this “go big or go home” attitude to rates has not been extended to guaranteed investment certificates, which are one source the banks use for the money they lend out as mortgages. The current posted Big Bank five-year GIC rate tops out at 2.1 per cent, or 63 per cent of its 10-year average rate of 3.31 per cent.


John Turner, director of mortgages at Bank of Montreal, said the banks are simply reacting to the rising rate environment in setting borrowing costs for mortgages.


“It’s not about any of us trying to get ahead of things, because the market won’t let us,” he said. “It’s a very competitive market.”


Mr. Turner cited two factors that have driven fixed-rate mortgages lately. One is an effort by the banks to anticipate higher bond yields and avoid repeated increases in mortgage rates. “We don’t like to move rates because it causes dissatisfaction, and it causes disruption in the sales force.”


The other driver of higher mortgage costs is the rising cost of providing interest-rate guarantees for people who are smart enough to lock in a rate as soon as they start looking for a home. Mr. Turner said these costs haven’t been a factor much in recent years because the general trend for interest rates has been downward. Now, with rates on a definite upward path, rate guarantees are a bigger consideration for lenders.


Banks won’t say this out loud, but their own internal business considerations help set mortgage rates as well. Sometimes, this works in favour of borrowers. In February, for example, the banks lowered mortgage rates even as bond yields rose a tick or two. Now, the banks seem to be in a mood to emphasize profits over market share or, as it’s known in bank land, widen spreads between what they charge and what they pay.


“The banks normally do this when interest rates are moving,” said David McVay, a financial services industry consultant with McVay and Associates. “But their retail profits have been pretty strong, and they widened spreads quite well when they put up line-of-credit rates [in 2008-09]. That was a big boost to profits right there.”


Mr. McVay seconded Mr. Turner’s comment about the mortgage marketplace being too competitive for banks to be out of line with their mortgage rates. In fact, there is a huge variation in rates right now that demands some shopping around from homebuyers and people facing renewals.


One of the better deals in the mortgage market today is BMO’s offer of a 4.35-per-cent five-year, fixed-rate mortgage. You can’t take an amortization longer than 25 years with this mortgage, and there’s less room to make pre-payments than there is with a standard BMO mortgage. But a glance at the websites of several mortgage brokers yesterday suggests you won’t find a lower rate.






















28 Apr

Real estate fraud rare but experts warn homeowners to be on the lookout


Posted by: Kimberly Walker

by Malcolm Morrison, THE CANADIAN PRESS
TORONTO – Real estate fraud is a rare thing but experts in the field say that doesn’t mean people should assume it will never happen to them – considering the misery it can inflict on the unwary homeowner, it’s worth knowing that it’s out there and it’s nasty.

“I compare the fraud issue to the lottery,” said Ray Leclair of title insurance provider TitlePlus.

“There are millions of transactions in Ontario alone in real property every year. A very minute number of those are fraudulent. So for the public to win or lose in the fraud lottery, the odds are very low.”

But it’s not an experience you would ever want to go through, he said, even though governments have put in place some measures to make it easier for people to regain ownership title that have been fraudulently pilfered.

“At the end of the day, even if you get your title back, there’s the question of (legal fees).”

There are two types of real estate fraud to be concerned about – mortgage fraud and title fraud.

Mortgage fraud is something that is more troublesome for lenders. It involves a fraudster leaving the title or ownership of a property in the current owner’s name but mortgaging it without their knowledge, sometimes by fraudulently discharging the existing mortgage. It can also happen when a would-be homeowner falsifies information to get a mortgage.

“That’s just a fact of lending,” said Laura Parsons, manager of specialized sales for Bank of Montreal in Calgary.

“There are people out there who normally wouldn’t get a loan granted to them but because they are fraudulent and give incomplete information or they don’t let the lender know all the information, they end up getting approved.”

What the average homeowner has to look out for is title fraud. It happens when a fraudster changes the ownership or title of a property into another name in order to sell or refinance the property.

According to the Ontario Ministry of Consumer Services, “it often involves fraudsters using stolen identity or forged documents to transfer a registered owner’s title to himself or herself securing a mortgage on the property and then disappearing with the mortgage proceeds.”

Parsons calls it a form of identity theft.

“So they know all the details of the person, they go to the land title registry, they pull a title and they find out that there is no encumbrance on the property,” she said.

“Now they have basically a ticket to sell the property, so they go in and they can change home ownership.”

If the fraudster has enough information, they can change ownership of the property at a land titles office, put a property in their own name. Then they either sell it or go to the bank and get a homeowner line of credit or a mortgage put on that property for their own purposes.

You would think that you would know immediately if you had been scammed, but fraudsters aren’t entirely stupid and there are ways to delay finding out.

“They have gone in and taken the title or put a mortgage on and then they will pay it for two or three months,” said Leclair.

In the meantime, you’re getting all your bills and everything looks fine.

“In the meantime, your mortgage is gone and there’s a new mortgage on there – it’s going to be paid for two or three months and then two or three months later, they default, there’s two or three months waiting time before the bank actually does something so six months, nine months down the road, you now get an angry bank calling you, saying they’re going to sell, or you get someone showing up at the door saying you’re out the door.”

Leclair also pointed to a fraud victim in Vancouver who started wondering why he wasn’t getting his property tax bill.

He called city hall and was told “well, you sold the property.”

“It’s very ordinary things. You don’t get a water bill, you don’t get those kind of things that could be a hint that something has changed along the way.”

Leclair notes that while the government has systems in place to help you if you are defrauded, it’s up to the homeowner to monitor. Both he and Parsons emphasized the importance of protecting your private information as a way to avoid becoming a target of real estate fraud.

Parsons said, in particular, you want to keep your social insurance number confidential. And that means not carrying around your SIN card in your wallet where it could be lost or stolen.

“And now with these recycling bins, people are throwing more and more of their mail and personal information in the blue bin – people should get a shredder – $149 buys you some security,” she said.

And consider title insurance. Not only does it protect you now and in the future, it provides coverage for fraud that may have occurred prior to your purchase of your home.

Leclair said the insurance costs about $200 to $300, depending on the value of the property, and it is good for as long as you own the home.

And one of the worst things you can do?

“I’ve read articles where people say the best protection against fraud is to get the biggest mortgage you can on your property – it’s a fallacy,” said Leclair.

“People figure, well if there’s no equity in the property, how can they steal it? Well they can go in and fraudulently discharge the mortgage. I laugh every time I see this. Discharging a mortgage is probably simpler than anything else. It’s the bank’s signature, it’s very easy to imitate. Who knows what a bank’s signature looks like?”


Beware fraudsters’ dirty tricks

A hot real-estate market has lit a fire under criminal activity

Be warned: Booming markets bring not only higher home prices but often a significant increase in residential real-estate fraud.

That is the word coming out of such disparate organizations as title insurance companies, mortgage insurance firms and law enforcement agencies.

“Yes indeed, we see instances of fraud rise with booming markets, especially in major cities,” says Ray Leclair, vice-president at TitlePLUS, the title insurance arm of Lawyers Professional Indemnity Co., which provides lawyers their version of medical malpractice insurance.

But, he adds, real-estate fraud is not confined exclusively to any upsurge in prices. “It can also take place years after you have bought a home, at a time when homeowners would not expect it.”

While there are no hard statistics on real-estate and mortgage fraud for Canada, in the United States estimates of annual losses run between $4-billion (U.S.) and $6-billion a year. In June, 2008, the U.S. Federal Bureau of Investigation had 42 working groups investigating 1,380 cases – and that was after the U.S. real-estate bubble burst.

“Industry statistics suggest mortgage fraud alone results in annual losses in the hundreds of millions of dollars,” Mr. Leclair says. “In many cases there is little publicity because banks are concerned about maintaining customer confidence.

“They just quietly absorb the losses.”

If you want another statistic, think about this one. Many forms of real-estate fraud require the participation of a lawyer. Last fall, The Globe and Mail reported that in Ontario, between 100 and 140 lawyers were under investigation for complaints having to do with alleged mortgage irregularities.

So what is real-estate fraud?

Criminals are an inventive lot. If there is money to be made, they will find ways to get at it. When 1930s bank robber Willie Sutton was asked why he robbed banks, his answer was a no-brainer. “Because that is where the money is,” he said.

Same with real estate. When the average home price in the GTA is well above $450,000 and a $400,000 mortgage is at stake, that is a powerful incentive for a few days’ work for those with a criminal bent.

The Criminal Intelligence Service Canada (cisc.gc.ca), a group that represents 308 law enforcement agencies across Canada, lists half a dozen schemes that have made villains millions in recent years. They range from tarting up a grow-op house and selling it complete with mould and structural damage to unsuspecting buyers to “fraud for shelter.”

In those cases, a buyer wildly overstates family income, buys a home, gets a mortgage and then promptly stops paying the bills. These relatively garden-variety criminals can often get six months free of basic living costs before they are forced to move on.

More common scams are variations on the Oklahoma, in which a property is sold to a fictitious buyer, who then arranges a large mortgage, pockets the proceeds and disappears. This may also involve a number of equally fictitious buyers flipping the property one to another. Each sale raises the purchase price until the final sale involves a whopping big mortgage.

This crew then pockets the proceeds and vanishes.

Then there are those involving identity theft. Criminals find ways – almost always involving bent lawyers – to change the name of the registered owner on the title to the property. They then obtain a mortgage or even sell the home, collect the proceeds and move on.

The real owners only find out when the mortgage company starts sending nasty letters about missed mortgage payments or the new owners show up with a moving van.

Is there any way to protect homes against fraud? Not surprisingly, Mr. Leclair is a keen proponent of title insurance. Yes, lawyers are supposed to do due diligence, but all they can certify is that everything was ship-shape on closing day.

Title insurance, however, safeguards against fraud, misrepresentation or error as long as a person owns a home.

Title insurance can even kick in should a builder make an unintentional error in paperwork. Mr. Leclair talks about a recent case where a client bought a condo with a lake view and paid extra for it. On moving day, however, his key did not fit the door of the suite he thought he bought. It did, however, open the door to the one across the hallway with a lovely view of a parking lot.

“It was a clerical error,” Mr. Leclair says. “It was not intentional.”

TitlePLUS worked with their client and the developer to find a resolution. The client liked the suite, so a significant reduction in purchase price was arrived at.

“Title insurance can also cover a huge range of small items,” Mr. Leclair says. “We get lots of cases involving things like the vendor not paying taxes or utility bills as claimed or buyers not given the parking spots they were entitled to.”

He suggests simple preventative measures such as checking credit scores regularly to spot inquiries you do not recognize; protecting personal documents so no one can access birth certificates, social insurance numbers, bank statement or credit card information; and keeping an eye on the mail lest property tax and utility bills you do not recognize show up.

“Real-estate fraud is one of those crimes that can happen to anyone,” he says. http://www.theglobeandmail.com/real-estate/beware-fraudsters-dirty-tricks/article1535677/?cmpid=rss1



26 Apr

Fixed Rate and Variable Rate Blended Mortgage


Posted by: Kimberly Walker

The MERIX 50/50 Wise Mortgage

“…the wise choice in today’s economy”

Don’t choose between Fixed and Variable. Choose Both!


– 50% of mortgage amount is at current 5 year fixed rate pricing (now at

– 50% of mortgage is at current 5 year ARM pricing (now at

4.64%)Prime-.40 %)

Ideally suited for:

– Customers who are unsure whether to go Variable or Fixed. This product eliminates the biggest dilemma facing

mortgage borrowers in today’s economy.

– Customers who want a low interest rate and are more risk-averse than a typical ARM client. The weighted

average interest rate

the mortgage is subject to interest rate risk.

– Customers who want added flexibility in paying down their mortgage. The two portions operate independently of

each other, so your customers can choose to make prepayments on the fixed portion which has the higher

interest rate or they can choose to pay down the ARM portion aggressively which in turn further minimizes their

future interest rate risk!

– Customers you may be on the verge of losing to a competitor.

on this mortgage is approximately 3.25% given today’s current pricing! And only 50% of



Submit the deal to MERIX as a 5-year fixed rate. Identify “50/50 Wise Mortgage” in notes to the UW

Additional Features:

– One collateral charge is registered

– Each portion operates independently in terms of payment frequencies, privileges, and prepayment penalties.

– Each portion has the usual 20/20 prepayment privileges.

– This product will be part of our regular offering (i.e. not a quick close).



– The ARM portion can convert to a fixed rate


– The ARM would convert at the then-prevailing MERIX rate for the term closest to the remaining term on the ARM.

This ensures

at any time without penalty, HOWEVER, the term cannot bethe two portions renew/mature on the same day.


– The mortgage is portable, either to a new 50/50 product or lock in the arm portion prior to porting and port the

whole mortgage as a blended fixed rate.

No penalties charged in either scenario.

Rate Hold:

– 120 days rate holds on purchases, 60 day refinances.

No Transfers/Switches permitted. No pre-approvals

Additional Info:

– Max amortization is

35 years Max LTV is 95%

– Product will qualify at the 5 year fixed rate (

– Second Homes permitted.

15 bps rate premium applied to both portions for Stated Income or Non owner occupied Rental.unless the 3 year published rate is higher).


however will be paid separately on each portion.

Regular 5 year term compensation applies. Compensation is the same for both ARM and Fixed

23 Apr

8th Annual Garage Sale


Posted by: Kimberly Walker


By The Walkers

Saturday, May 1 at 9:00 AM

 Addresses, Sales Lists & Maps Available: 13824 19A Avenue

 Start Point: Bell Park

1. 13816 19A Avenue – clothes, shoes, furniture

2. 13868 19A Avenue – house hold items, books, clothing, ect.

3. 13561 19 Avenue – kids toys, miscellaneous

4. 13936 18A Avenue – brass head and foot board, TV., TV stand, household items, miscellaneous

5. 13885 18A Avenue – cedar scrubs, perennials, household items

6. 13899 18A Avenue – miscellaneous

7. 13768 18A Avenue – bedroom furniture, miscellaneous

8. 13781 18A Avenue – miscellaneous

9. 13761 18A Avenue – miscellaneous

10. 13690 18A Avenue – miscellaneous

11. 1921 138A Street – kids toys, books, decorative accessories, brand new car tires – 2009 Toyota Sienna, miscellaneous  

12. 13885 18 Avenue – all house furniture, drum set, keyboard, ect

13. 13761 18 Avenue – miscellaneous


Amble Greene:

1. 1741 Amble Greene Drive – furniture, pictures, black curtain rods,        basketball hoop, aluminum shutters, household items

2. 1693 134B Street – kids toys, miscellaneous

3. 13521 19 Avenue – furniture, sports equipment, books, fabric,                  miscellaneous


Chantrell Park Estate:

1. 2289 138A Street – household items, appliances, trailer, miscellaneous

2. 2281 Chantrell Park Drive – miscellaneous



1. 14088 31A Avenue – miscellaneous

2. 14099 21A Avenue – miscellaneous

3. 14136 29 Avenue – miscellaneous

4. 14240 29A Avenue – household items, kids toys, ect.


By The Walkers

Saturday, May 1 at 9:00 AM


Addresses, Sales Lists & Maps Available:

13824 19A Avenue


Start Point: Bell Park

1. 13816 19A Avenue – clothes, shoes, furniture

2. 13868 19A Avenue – house hold items, books, clothing, ect.

3. 13561 19 Avenue – kids toys, miscellaneous

4. 13936 18A Avenue – brass head and foot board, TV., TV stand, household items, miscellaneous

5. 13885 18A Avenue – cedar scrubs, perennials, household items

6. 13899 18A Avenue – miscellaneous

7. 13768 18A Avenue – bedroom furniture, miscellaneous

8. 13781 18A Avenue – miscellaneous

9. 13761 18A Avenue – miscellaneous

10. 13690 18A Avenue – miscellaneous

11. 1921 138A Street – kids toys, books, decorative accessories, brand new car tires – 2009 Toyota Sienna, miscellaneous  

12. 13885 18 Avenue – all house furniture, drum set, keyboard, ect

13. 13761 18 Avenue – miscellaneous


Amble Greene:

1. 1741 Amble Greene Drive – furniture, pictures, black curtain rods,        basketball hoop, aluminum shutters, household items

2. 1693 134B Street – kids toys, miscellaneous

3. 13521 19 Avenue – furniture, sports equipment, books, fabric,                  miscellaneous


Chantrell Park Estate:

1. 2289 138A Street – household items, appliances, trailer, miscellaneous

2. 2281 Chantrell Park Drive – miscellaneous



1. 14088 31A Avenue – miscellaneous

2. 14099 21A Avenue – miscellaneous

3. 14136 29 Avenue – miscellaneous

4. 14240 29A Avenue – household items, kids toys, ect.


22 Apr

Global economy growing but rising government debt worrisome


Posted by: Kimberly Walker

By Martin Crutsinger  WASHINGTON — The International Monetary Fund says the global economy, after enduring a crippling recession, should see better-than-expected growth this year, led by strength in China and other developing countries.

In an updated economic outlook, the IMF forecast that the world economy would expand 4.2 per cent this year, faster than its previous projection and a sharp improvement from 2009 when global output fell by 0.6 per cent, the worst performance since the Second World War.

However, the international lending agency warned that the recovery still remained vulnerable with the biggest threat likely to come from a surge in government debt burdens.

“The outlook for activity remains unusually uncertain,” the IMF said in its latest World Economic Outlook. “Although a variety of risks have receded, downside risks related to the growth of public debt in advanced economies have become sharply more evident.”

The IMF’s estimate that the global economy would grow 4.2 per cent this year, represented a 0.3 percentage point increase from the IMF’s January forecast. For 2011, the IMF projected global growth of 4.3 per cent, no change from its January outlook. The IMF expects wide disparities between regions with the United States and Canada outperforming Europe and Japan but lagging China and other developing countries.

For the United States, the IMF expects growth of 3.1 per cent this year, in line with private forecasters, after a 2.4 per cent plunge in the U.S. gross domestic product in 2009, the biggest decline since 1946. That compares with growth of 2.6 per cent expected for advanced economies as a whole. U.S. growth is forecast at 2.6 per cent in 2011, slightly above the 2.4 per cent predicted overall for advanced economies.

“Turning to Canada, the recovery there is . . . expected to be protracted, reflecting more moderate demand growth than in the United States as well as the substantial strengthening of the Canadian dollar,” the report said.

It said output growth is projected at 3.1 per cent in 2010, up from 2.6 in the IMF’s previous projection in January. However, its current projection of 3.25 per cent growth in 2011 was down from 3.6 per cent in the previous report. Recent Bank of Canada estimates projected growth in Canada at 3.7 per cent this year and 3.1 per cent next year.

“Canada entered the global crisis in good shape, and thus the exit strategy appears less challenging than elsewhere,” the IMF said. “The main priorities are returning Canada’s debt to a downward trajectory, ensuring that financial stability remains intact — amid rising house prices — and raising Canada’s labour productivity and potential growth.”

The IMF forecast that China’s economy would surge 10 per cent this year and that India would grow 8.8 per cent. But it looked for the 16 European countries that share the euro currency to see economic growth of just one per cent in 2010.

The new forecast was prepared for upcoming meetings of global financial leaders, including daylong talks in Washington on Friday involving the Group of 20, which include the world’s richest industrial countries and major developing states including China, Brazil, India and Russia.

The U.S. delegation will be led by Treasury Secretary Timothy Geithner and Federal Reserve chair Ben Bernanke. The G-20 talks and weekend discussions at the IMF and World Bank are expected to focus on overhauling financial regulatory systems and rebalancing global growth to make the recovery more sustainable.

Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney will lead the Canadian delegation.

U.S. Treasury officials who briefed reporters Tuesday on Geithner’s agenda said they believed support was growing for a financial risk levy along the lines of one proposed by U.S. President Barack Obama that seeks to raise $90 billion from the largest American banks to recoup losses from the $700-billion financial bailout fund. Flaherty has said Canada would not support such a levy.

The U.S. officials said they expected another key discussion topic would be the need to eliminate global imbalances, a goal that Obama and other G-20 leaders set at a summit in Pittsburgh last September. The rebalancing effort would mean countries with large trade and budget deficits would seek to boost savings and lower domestic demand while countries such as China that are running huge trade surpluses would transition to more domestic-led growth.

To foster the change in China, the Obama administration has been pressuring Beijing to allow its currency, the yuan, to rise in value against the dollar. American manufacturers contend the yuan is undervalued by as much as 40 per cent, giving Chinese producers huge trade advantages over U.S. companies.

However, the Treasury officials did not answer directly when asked whether the U.S. complaints would be brought up in the G-20 discussions. The administration has been recently seeking to temper its rhetoric with China on currency issues in hopes a softer tone will gain better results.

The IMF said it was essential for China, now the world’s third-largest economy, to do its part to assist in combating global imbalances.

The IMF said even with global growth rebounding, unemployment was likely to remain high in the United States and other developed countries over the next two years, given the severity of the downturn in those countries. The Associated Press http://news.therecord.com/Business/article/700389

21 Apr

Mortgage Coming Up For Renewal – Call Today Rate Holds Up To 120 Days


Posted by: Kimberly Walker

Bank signals higher interest rates only weeks away, as dollar soars

By Julian Beltrame, The Canadian Press

OTTAWA – The Bank of Canada signalled Tuesday it is poised to start raising interest rates in a matter of weeks, a move that will make borrowing costs higher on everything from car loans to mortgages.

Over the last few weeks, Canadians have already felt the impact of expectations that rates were due to rise – most major Canadians banks started hiking fixed-rate mortgage rates by as much as 0.85 per cent.

But with the central bank now saying it is prepared to move off its emergency 0.25 per cent overnight rate as early as June 1, the whole menu of variable and short-term rates are being brought into play.

“The one that will be affected is the prime lending rate… so the whole gamut will go up when the Bank of Canada raises its rate,” said Bank of Montreal economist Michael Gregory. Those include variable-rate mortgages, lines of credit and short-term car loans, he said.

The bank is also risking sending the Canadian dollar into the stratosphere by moving significantly and robustly before the U.S. Federal Reserve moves off its own zero per cent interest rate policy.

The loonie soared within minutes of the central bank’s 9 a.m. ET policy statement, which, while leaving the rate unchanged for now, made no secret of where it is headed.

The bank’s governing council declared that with the economy and inflation growing faster this year than had been previously thought, there was no need to stay with its “conditional commitment” to leave rates unchanged until the end of the second quarter, or after June 30.

“This unconventional policy provided considerable additional stimulus during a period of very weak economic conditions,” the council wrote.

“With recent improvements in the economic outlook, the need for such extraordinary policy is now passing, and it is appropriate to begin to lessen the degree of monetary stimulus.”

Hence, the council went on, it was withdrawing the conditional commitment.

The bank also said it was ending its key emergency lending instrument that helped inject liquidity into money markets during the crisis, which economists called a clear signal about the central bank’s future intentions.

The dollar rose about 1.5 cents shortly afterwards, breaking through the parity ceiling with the U.S. greenback. It closed up 1.58 cents at 100.12 cents U.S.

The currency move suggested that while the market had expected bank governor Mark Carney to signal a tightening bias, it was surprised by the hawkish tone.

“Removing the conditional commitment to keep rates on hold until July and ending purchase and resale agreements are as good as cementing a June 1 hike,” said economists Derek Holt and Karen Cordes Woods of Scotia Capital in a note to clients.

Holt added in an interview that the language from the bank opens the door for a bigger-than-expected hike in June, perhaps by as much as half a point.

Not all analysts believe the market is right to anticipate a June hike, however. Some say Carney is still leaving himself some wiggle room to stay at the lower bound until July 20, while others are advising the governor to wait until the Fed acts.

“I would keep rates unchanged until the Fed moves, because otherwise you create this problem on the Canadian dollar,” said Brian Bethune, chief economist with IHS Global Insight.

A strong loonie is regarded as a brake on economic growth because it makes the price of Canadian exports less competitive in foreign markets.

In the statement, the central bank conceded the point, listing the “persistent strength of the Canadian dollar,” along with poor productivity and low U.S. demand as “significant drags” on the Canadian economy.

But economists suggested the bank’s language suggests it is prepared to live with a strong loonie.

Even so, economists that favoured a rate hike said the bank can only get so far ahead of the Fed. They note the Canadian bank has flown solo twice before in the past two decades, only to have to subsequently pull back.

“The need for emergency rates have passed but we still have a need for low rates,” Holt explained.

C.D. Howe’s monetary policy council, a sampling of nine economists, sees the bank’s policy rate rising to 2.5 per cent by the spring of 2011. That is a significant hike from the current level, but it is still below what would be considered normal and only slightly above the rate of inflation.

While the tone on interest rates was hawkish, the bank’s view on the economy was only mildly more rosy. It upgraded this year’s growth to 3.7 per cent, from a previous prediction of 2.9 per cent, but it lowered its forecast for 2011 to 3.1 per cent, and it believes 2012 will only bring a 1.9 per cent advance.

It now expects the economy to return to full capacity in the spring of 2011, a full quarter before the previous estimate it made in January.

The bank did raise the temperature, slightly, on inflation.

It said core prices have been firmer than projected, but that they were expected to ease slightly in the second quarter of this year and remain near the bank’s two per cent target over the next two years.

Total headline inflation, which includes volatile items such as gasoline prices, was expected to be higher than two per cent this year, but returning to target in the second half of 2011.

20 Apr

Likelidhood Of A Rate Increase In June


Posted by: Kimberly Walker

  • The Bank of Canada held the overnight rate target at 0.25%, but surprised markets by removing the conditional commitment to keep rates there until the end of the second quarter of 2010. This increases the likelihood of a rate increase in June.
  • The Bank of Canada has recognized stronger-than-expected near term growth in both the global and Canadian economic recovery, but remains cautious about the great amount of uncertainty that remains as monetary and fiscal stimulus unwinds.
20 Apr

Taxes Versus Household Income Plus Interest Rates Must Rise


Posted by: Kimberly Walker

Taxes take up greatest part of household income By The Canadian Press VANCOUVER, B.C. – A prominent think-tank that’s often critical of government spending policies says Canadian families spend more than two-fifths of their total income on taxes.

The Fraser Institute says its annual Canadian Consumer Tax Index calculated that taxes ate up 41.7 per cent of the average family’s income in 2009.

That’s up from 1981 when taxes accounted for 40.8 per cent of a family’s income, or 33.5 per cent in 1961 when the Fraser Institute first compiled the index.

Interest rates must rise, but some analysts wonder what’s the hurry

By Julian Beltrame

OTTAWA — It’s a minority view, but some economists are advising the Bank of Canada to hold off on raising rates — for a long time.

The reason, says Carl Weinberg of U.S.-based High Frequency Economics, is that the Canadian economy is not nearly as strong as recent data suggests and inflation is at acceptable levels.

He says Canada’s central bank could easily keep interest rates at record lows until next year and not worry about inflation getting out of hand.

That flies in the face of the prevailing view of economists, who believe Bank of Canada governor Mark Carney will start raising rates in July — or possibly even in June.

Carney is expected to give a strong hint into his thinking this week, starting on Tuesday with a scheduled interest rate announcement.

No one thinks he will move this week on the policy rate, which is at an emergency level of 0.25 per cent, but the governor is expected to issue a new forecast on both growth and inflation that will tip off when he will act.

Carney made a conditional pledge last spring not to raise rates until the end of the second quarter of 2010 unless inflation becomes a worry.

That’s going to be a high hurdle for him to jump if he does intend to move early, says Michael Gregory of BMO Capital Markets.

“If they go before June, there’s only one reason if they wanted to maintain their credibility, and that’s the inflation projection has changed,” he said.

“But that’s sending a pretty sharp inflation warning and I’m not sure what’s on the ground now justifies ringing that alarm bell.”

Statistics Canada reported last month that the core inflation rate, which the Bank of Canada watches closely, was 2.1 per cent in February while overall inflation was 1.6 per cent.

Both are within the central bank’s target range for the annual inflation rate, set at between one and three per cent.

The Canadian Press